We have all heard about how prices have increased over the years. I know this chicken rice shop I frequent which used to charge MYR2.60 a plate when I first started working now charges MYR5.50. That’s a 112% increase.
When I started working, my starting pay was MYR1,800 (USD560) a month and currently, I understand that the starting pay for that same position in that same company is MYR2,600. That is a 44% increase.
We can go into the topic of how increase in income doesn’t match inflation rate because the economy sucks and that is why we are all screwed. But that is not quite the notion today, though close.
Generally, the Malaysian public as a whole has brilliantly (or stupidly depending on how you see it) accepted and adapted the slow increase in salary. Some are fortunate to have parents as ATMs, while some just max out the credit cards and perpetually be in debt. The rest typically carry the if-the-good-is-good-the-price-doesn’t-matter mentality.
Essentially, chicken rice for MYR5.50 or teh-tarik for MYR2.50 or char-kuey-teow for MYR6.50 or nasi-lemak for MYR7.50 is still not that bad though even-though those prices have already inflated 75% - 100% in the last 5 years or so. It is not the end of the world.
However… the story is very different when prices of this particular thing inflate at a frightening rate – the prices of properties.
I bought my first property 6 years ago. It’s not exactly the best in town but with the same amount of money, there is no way I can buy that kind of property in KL anymore.
Paying for a plate of chicken rice which has increased from MYR2.60 to MYR5.50, despite it being a 112% increase, is a totally different story compared to paying for a property which has increased from say, MYR350,000 to MYR500,000; which represents only 43% increase. Mind you, such is the range of property prices in KL.
With the current trend of property companies seemingly putting up projects only for the rich, i.e. everything seems to be MYR600k and above, the general working population in KL will only end up with huge amount of debt when they decide to buy a property.
And everything is connected. A huge mortgage will then put pressure on the working population a.k.a. modern slaves to “work hard”. The need to “work hard” will put us at the mercy of the companies we work in. The situation becomes competitive amongst modern slaves. Willingness to “work hard” to service our commitment will result in us keeping quiet when pay is low or bonus is cut because there will be another modern slave who will be willing to “work harder”.
Ultimately, salary will continue to remain stagnant or rise slowly.
And that… is what ultimate kills us all.
When I started working, my starting pay was MYR1,800 (USD560) a month and currently, I understand that the starting pay for that same position in that same company is MYR2,600. That is a 44% increase.
We can go into the topic of how increase in income doesn’t match inflation rate because the economy sucks and that is why we are all screwed. But that is not quite the notion today, though close.Generally, the Malaysian public as a whole has brilliantly (or stupidly depending on how you see it) accepted and adapted the slow increase in salary. Some are fortunate to have parents as ATMs, while some just max out the credit cards and perpetually be in debt. The rest typically carry the if-the-good-is-good-the-price-doesn’t-matter mentality.
Essentially, chicken rice for MYR5.50 or teh-tarik for MYR2.50 or char-kuey-teow for MYR6.50 or nasi-lemak for MYR7.50 is still not that bad though even-though those prices have already inflated 75% - 100% in the last 5 years or so. It is not the end of the world.
However… the story is very different when prices of this particular thing inflate at a frightening rate – the prices of properties.
I bought my first property 6 years ago. It’s not exactly the best in town but with the same amount of money, there is no way I can buy that kind of property in KL anymore.
Paying for a plate of chicken rice which has increased from MYR2.60 to MYR5.50, despite it being a 112% increase, is a totally different story compared to paying for a property which has increased from say, MYR350,000 to MYR500,000; which represents only 43% increase. Mind you, such is the range of property prices in KL.
With the current trend of property companies seemingly putting up projects only for the rich, i.e. everything seems to be MYR600k and above, the general working population in KL will only end up with huge amount of debt when they decide to buy a property.
And everything is connected. A huge mortgage will then put pressure on the working population a.k.a. modern slaves to “work hard”. The need to “work hard” will put us at the mercy of the companies we work in. The situation becomes competitive amongst modern slaves. Willingness to “work hard” to service our commitment will result in us keeping quiet when pay is low or bonus is cut because there will be another modern slave who will be willing to “work harder”.
Ultimately, salary will continue to remain stagnant or rise slowly.
And that… is what ultimate kills us all.
24 comments:
Some more medical leh? You cannot fall sick.. once you fall sick, that's it. Buy insurance also not enough.. might as well just die.
Property is just another form of hedge against inflation or money devalueing. Ur so call appreciation of 350k to 600k is a combo of the above. For property to appreciate on a steeper scale, you need massive increase in population through inwards migration or scarcity of land, ie SINGAPORE. For Msia that hv negative migration ie pendatang leaving and plentiful of land plus low income bracket, property price wont go up la.....so its a matter of your money devalueing and it is falsely reflected in ur higher price home,cos even if u sell it now u aint gonna get another one at 350, cos da rest has gone up to 600k.
Some ppl are gonna argue our RM has appreciated cos RM vs USD is now at 3.20 as compare to 3.60 a yr ago...ahem....well if u only read NST,TheStar then i don blame u la. Our RM did not appreciate, it was Uncle Sam that electronically printed thrillions of dollars these two yrs that cause green bag to devalue, not our RM appreciate.
Anyway, to hedge ur money from inflation or devaluation, it is still better to buy property instead of.....MUTUAL/EDUCATION/RETIREMENT/SAVINGS FUNDS!!!!!
Urrgghhh....i stl cant bliv ppl still buy these funds.....pay 20k/yr for 10 yrs n wen u retire age 60 u will get 3k/mth until u die....these ppl r so stupid! 20k in 2010 is a lot more value than 36k in 2050,ur chicken rice is already RM25 lo yorrrrrrr....sigh....sorry la zewt hv to use ur blog to wake these ppl up....
Being killed by property prices is maybe a bit strong. We can escape the "Died game over" if we are prepared to do some tweaking. We are not in Hong Kong. If in Singapore, can buy house in JB. If in Penang, can buy house in SP. If in KL, can buy house in Seremban. The Japs do it (suburb living). The Americans do it. Lots of others do it, but we Malaysians cannot do it. I've yet to hear a convincing explanation why (and bad public transport is not a valid reason if you're already driving an RM80,000 car.)
IMHO much of our scarcities are self created and self imposed due to laziness, etc. When I lived in Singapore, spending ~SGD60 a day was normal for me. Now that I live in a kampung, RM10 can last me 2-3 days. No financial stress. If you do have financial stress, look at your lifestyle. Ask yourself how many of those things you call unavoidable are really, really unavoidable.
Yes, not everyone is prepared to pay the cost of low prices.
Well said and I always find your posts enlightening as someone who's an expert in the finance world. Not everyone but maybe just me seldom to the maths and just go with the flow. Hate to admit but I might just be another slave keeping quiet and just satisfy with the pay and the promise of opportunity to grow in the company though growing doesn't necessary mean bigger paycheque. It's BIGGER responsiblity with slight increment.
wow wow wow.... yeah i always complain why it can be like that expensive every time i back home >< even though i was using YEN at that time... just not willing to pay so much >< the inflation is not that significant in japan (well dont convert back to RM) anyway i am going back msia next year... oh... wonder how to survive ><
@Zewt,
How many years ago when u got that first salary of 1.8k?
@InjusticeSystem,
Please please please start your own blog..Your posts are very berry eye-opening and enlightening just like zewt's.
When I was a kid, a plate of economy fried meehoon only cost me 20 sen from the market and now its costs RM1. This is in a spate of 20 years plus. Things will continue to rise in price because of many factors (which we know so well).
Today I read in the papers that soy sauce, rojak sauce and other soy products will increase in price by 15-20%. But yet our salary doesn't reflect the inflation of our country retrospectively. WHY?
This country has no proper legislation about wages or any sort. This being one reason. I will not elaborate about other reasons. We must learn to make our money work for us and be thrifty.
DYING!! *GAG* CHOKING!! the need for money to pay for this n that..n worst still..food is definitely >rm7 when u work in places like mv..but ok la..i skip lunch
everything also inflating..my salary deflated a huge chunk! i used to think i was happy..but now..hahahhahaha oh well..
ok ok i will go buy property in Butterworth and stay there. PG island prices are > 600k nowadays. More like 900k. siao. and I am not willing to be tied down by such a big debt and work till the day I die. siao. Also, I am not willing to "work harder". Am already stressed out.
I think someone mentioned it above, and I agree... just don't buy property in KL.
tell me abt it zewt... i recently had a wake up call n decided i should put down a deposit for a condo... blog post going up on dat... took me a year to find something i can afford in d vicinity of PJ and still i had to lower my expectations versus d amt i'm able to afford... *haih*...
Kementerian perumahan patut mengawal developer supaya membina lebih rumah mampu milik dan mengutamakan penduduk yang masih belum mempunyai rumah sebagai syarat utama pembeli.
Singapura, sekali lagi, menjadi contoh terbaik.
Benda mudah macam ini pun perlukan kita yang ntah sapa-sapa ini nak ajar. apa punya buduh menteri2 ni semua?
oh, mereka ada buat kenyetaan tentang perkara tersebut, seperti, 'Menteri perumahan seru pemaju utamakan rakyat berpendapatan rendah'.
yup. what the fuck is 'seru'?
1. meminta.
2. menasihatkan?
like, developer akan berlari membina sebuah kediaman mampu milik selepas kenyataan itu dikeluarkan?
Adakah menteri itu sendiri ingat/dengar/atau tau apa yang dicakapkannya tadi?
blahblahblah
Malaysia!
A friend in the property line of work is working her ass off for a Ferrari for the boss.
I remember eating a good chicken rice in Batu Pahat in 2009, it cost 2.50 rm. When I came to Taiwan, all prices are comparable to Slovenia, even the hawker. I was disappointed, because I kept comparing it with Malaysia. But if next time I travel to Malaysia again and the prices are also same as here and in Slovenia, then I will probably shoot myself... ehm, after I had some char kuey teow, that is :P
this is exactly what i'm thinking about recently. no doubt there are many candidates out there who are willing to 'work harder' than me.
i can't even afford my rental sometimes. let alone buying a house. sigh.
Agreed with your post.
But I suppose the economy also suffered with a blow from the recent crisis, which brings down the property prices temporarily. My parents recently had a couple of properties in KL and they'd been stressing all over because they couldn't find the right buyer to sell.
This should be the right time for buyers to make their move before the prices start going back higher again, right?
What a timely post... I spent hours browsing property websites yesterday only to discover that 2-storey ranges from 500k to 700k and these are not even in prime KL locations. Not too long ago... At 380k, one could already get a decent brand new 2-storey. Kinda sad... makes me wonder if I should get one now... before the prices go any higher... :-(
gina - summore nasi lemak so good, all the more we need medical right?
InjusticeSistem - man, when are you going to start your own blog?
Johan H - i stay 8km from my office and it took me 1 hour plus to go home in the last couple of days. suburban living is just not possible in malaysia. i will not blame the public transport, but rather, too many ppl owing RM80,000 car. that's the problem.
Akira - well, we are always asked to take on more things to do but when it comes to money, it just not forthcoming, isnt it?
fufu - oh... good to know you are coming back :)... bring me all the souvenirs ok?
zewtreader - that's about 10 years ago. long eh?
pinknpurplelizard - you're lucky if you can still get it for myr1, the place i work, though a mamak, charges myr2! we cant have legislation to control minimum wage, i will probably blog about reasons later.
Huei - need to invest... wisely though.
Jennifer - penang? wow... sure die lor... an island like singapore, going to be super inflated that's for sure.
Terra Shield - but he suggested seremban, not quite possible. not for now.
~aSstHa~ - well, i can at least say... congrats on getting your property :)
j or ji - seruan dan janji adalah trademark kerajaan. saya menyeru akan berbuat demikian dan janji akan berbuat demikian. macam yang terbaru, janji "no cover up" dalam kes budak 15 tahun tu. betul ke no cover up? sama macam TBH kot.
Clare - we all do... :)
MKL - man, when are you coming to KL, i bring you to the best food around. fish head noodles!
zthon - i suppose you're from outstation. yeah, employees are really hoping ppl from outstation will come in and fill those modern slaves spot. more hardworking it seems.
JOEL - i think as a whole, everyone expected the property bubble to burse, but it didnt. at least not in a big scale. those who were forced to sell during the previous crisis are probably those highly geared. i know of ppl who actually have a couple of properties and all purchased with cash.
"maemee" - well, it will only go higher, prices are crazy. this is why i blogged long ago, that a collapse in the economy will benefit us. many just dont believe it.
Zewtreader:
Eh me shy la don say tat la,anyway,everythg u wanna know abt finance/mk $$$/share mkt/prop mkt/investing 101....everything on da internet lar....no need to blog 1,spend 10 minute a day reading dem u'll be surprise how much u can learn...besides, its good also to impress strangers wen u are attending those chinese wedding dinner where u share table with 9 other strangers n i tell u, at least 1 of them is either direct selling sales man or trust/retirement funds sales man aka financial planner...urrgghhh
zewt:
told u la i no passion la,besides, u r already bloggin abt all da stuff tat i find unacceptable in dis country,what for i need to start another blog bloggin abt da same stuff....though i do wish u blog more abt uitm,i don thk u ever blog anything abt uitm...ya i hv a personal thing against uitm
everything abt uitm is way wrong
from da racist entry policies to da sexual orgies they are having at da expense of my tax $$$ and da low std of racist graduates tat are unemployable and then absorb into public services or glc where once again my tax $$$ is use to pay their salary creating another cancerous cycle of low std offspring who will enter uitm finance by my tax $$$ again.......
i get a fucking temper just thinking n talking abt it....
yeah... been hoping to afford a property.. but wif the price of property in kl these days, damn difficult lor... sighs..
I second that... its simply absurd. Only recently I was looking for a house to buy. After some research, I decided to pay rent instead. It cost me at least RM500,000 to own a decent semiD house. Heck, it's cheaper for me to pay rent than owning a house in KL/Selangor area.
InjusticeSistem - sexual orgies? now, that i am not sure, u have to fill me in. i have good colleagues graduated from there, cannot simply hantam uitm lah, have to respect a bit.
missironic - can, join MCA :P
Kimmy - but renting is not a long term solution. at the end of the day, you are just paying for those rich to buy more houses... sigh.
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